In 2023, almost every major Texas reporting station near or south of Interstate 10 experienced record-high summers. This included Houston, San Antonio, College Station, El Paso, Brownsville, and Del Rio. Intense heat like that, coupled with the state’s rapid population growth, can send electricity demand surging. As a result, this strain on the electricity grid can cause rolling blackouts and large-scale power outages. And it’s not just a Texas problem; it is an issue for many states.
What can be done to keep the grid running reliably during extreme temperatures? One solution that utilities and Retail Electric Providers (REPs) have turned to is demand response programs.
Keep reading for more about what demand response is, how these programs work and how you can participate in one.
What is a demand response program?
Utilities need to provide customers with reliable electricity around the clock. To do so, they study trends in their service areas and try to match energy supply to the highest electricity demand that could be needed during a certain time. Usually, they end up with extra energy. But sometimes during extreme weather events, usage surpasses the amount of energy available which results in outages.
Demand response programs aim to prevent this scenario from happening.
The International Energy Agency states: “demand response refers to balancing the demand on power grids by encouraging customers to shift electricity demand to times when electricity is more plentiful or other demand is lower, typically through prices or monetary incentives.”
Demand response programs, along with smart grids and energy storage, help manage growing demand on electricity grids.
How do demand response programs work?
There are two common types of demand response programs:
- Price-based programs reward consumers who shift their usage to off-peak hours with lower electricity rates during those time periods. This is often referred to as a time-of-use plan.
- Incentive-based programs make direct payments to consumers who shift their energy usage as part of a demand response program.
For the purposes of this article, we will focus on the second type — incentive-based demand response programs. Here are two ways that these programs typically work:
- With a smart thermostat: When consumers opt in, their electricity company can adjust their smart thermostats to a more energy-efficient setting during specified periods. The adjustment is usually just a few degrees. For participating in the program, customers are often rewarded with a one-time bill credit. What if a customer doesn’t want to use less energy during a demand event? They can simply override the temperature adjustment, either manually or by their smart thermostat’s app.
- Without a smart thermostat: Some electricity companies offer a similar but manual demand response program. In this case, a customer would be notified of peak electricity times and be rewarded with a bill credit if they reduce their usage during those periods.
If a customer doesn’t want to use less energy during these peak demand times, they don’t have to do anything.
What are the benefits of demand response programs?
When many people adjust their usage just a little bit in a demand response program, it can create a big impact.
In addition to helping avoid power outages, demand response programs can also lower the cost of electricity in wholesale markets. This can lead to lower retail rates.
It’s also an easy way to lower your carbon footprint, help your community stay powered, and earn bill credits without sacrificing comfort.
How do you participate in a demand response program?
In Texas, you should check with your current REP to see if they offer a demand response program.
If you cannot find information on your REP’s website, check with the manufacturer of your smart thermostat.
What demand response programs are available in Texas?
Several REPs offer demand response programs to their customers. Here are a few from electricity companies in Texas you can trust:
Reliant Energy
Degrees of Difference is the demand response program offered by Reliant Energy. Eligible customers can receive a $50 bill credit for enrolling. (See terms and conditions here.)
Owners of a Google Nest, Honeywell Home, or Emerson Sensi smart thermostat can enroll. There is also an option for people without a smart thermostat.
For answers to program-related questions, check out the helpful Reliant Energy FAQ section.
Direct Energy
The Reduce Your Use® demand response program from Direct Energy offers a $25 bill credit for enrolling. (See terms and conditions here.)
Direct Energy customers with a Google Nest, Honeywell Home, or Emerson Sensi smart thermostat can participate.
Like Reliant Energy, Direct Energy offers helpful answers to frequent questions about the program.
Green Mountain Energy
Ready, Set, Relax is the demand response program offered by Green Mountain Energy. After enrolling, participants can receive up to a $50 bill credit. (See terms and conditions here.)
Unique to Green Mountain Energy’s program is its donation on each participant’s behalf to Green Mountain Energy Sun Club®, the REP’s charitable organization. It invests in non-profits to bring sustainability to communities across the U.S.
Conclusion
As you can see, demand response programs offer an effective way to balance electricity supply and demand. By incentivizing people to adjust their usage during peak demand periods, these programs can improve grid reliability, reduce energy costs, and promote energy conservation.
Now that you know more about demand response, you can check with your REP to see if you’re eligible to participate in one.